Monthly Archives: "March 2016"

The Fading Trend of Outsourcing Manufacturing Jobs

It seems that the trend for the last few decades in corporate America has been: moving American businesses into different countries that offer cheaper expenses. This may help the company’s bottom line but it is detrimental for the American economy and American workers that are left without a job. There are still plenty of companies left that refuse to abandon the respect that being Made in America earns. Made in American companies also boast using high quality materials. And with stricter labor laws, they offer their employees a safer and fairer work environment.

Companies that have never left their American homeland have most likely experienced hardships, especially during the recession that lasted from 2007-2009. Now that the recession has ceased, companies are being repaid by appreciative Americans that are back on their feet. It’s amazing to see the amount of companies that refused to give up on quality for profit. While they may have experienced minimal profits during the recession, the fact that they remained loyal to their country and citizens is turning out to be a great decision for their bottom line.

Things have changed. The difference between production cost in America and China is not as great as it used to be. According to a recent article from CNN Money, quote:

Surprise! Making goods in China isn’t actually that cheap.

These days, China’s labor costs are only 4% cheaper than those in the U.S. when productivity is factored in, according to Oxford Economics.

That’s because wages in China have risen much faster than increases in productivity. Coupled with a strengthening yuan, Chinese labor costs have grown dramatically. Meanwhile, huge productivity improvements in the U.S. have helped keep labor costs down.

The bottom line: Manufacturing in China is no longer a surefire way to save on the cost of labor.

One such company that is reaping the benefits of being American made is, L.L. Bean. Based in Maine for over a hundred years, L.L. Bean is known for manufacturing outdoor clothes and rubber boots. The company’s signature Bean Boot has been selling out every year since 2011. It seems that the signature boot has hit a fashion trend and has been going strong for years. One major reason that L.L. Bean can’t keep their boots on the shelf is due to their refusal to export their operations overseas. By keeping their boot manufacturing local, they are able to keep their brand in demand. They also boast about using only American made materials to construct their boots. Even using steel from local artisans!

L.L. Bean: The Example of Profitable Made in America Par Excellence

L.L. Bean operates out of an impressive 170,000 square foot factory in Maine. Bean understands how important its employees are to their brand. They have begun training their own workforce by offering a training program that can teach anyone how to make boots from the bottom up. It seems that a lot of the shoe building work has left America and so have the people that are familiar with manufacturing them. It is said that almost 90 percent of shoes worldwide are created in China. Ensuring that their employees are being properly trained is a big deal for the quality of their brand. The employees are also treated to company sponsored Zumba classes in the factory that the boots are made.

Brands like L.L. Bean should be applauded for sticking to the Made in America brand. Other companies could learn a great deal from Bean. By treating and training their staff correctly and by using local products to manufacture their own, they are essentially building a bond with their American consumers. While moving overseas may work out for some companies, it is looked as the easy way out by blue collar Americans.